14 December 2023-Treasurer Stacy Garrity today commended the House Education Committee for unanimously approving House Bill 1745, sponsored by Rep. Paul Friel (D-26). The legislation will create a tax credit for employers who provide contributions to PA 529 College and Career Savings Program accounts owned by their employees.
“Creating this tax credit will encourage employers to help Pennsylvanians save for their child’s or grandchild’s future education with our tremendous PA 529 program. HB 1745 will benefit families across Pennsylvania, and it will allow employers to offer a new benefit, making them more attractive places to work. I commend Rep. Friel for introducing this bill, and the House Education Committee for moving it forward. I look forward to working with the General Assembly to get this great idea enacted into law.”
Pennsylvania State Treasurer, Stacy Garrity
“I’m glad that the PA 529 Tax Credit bill passed out of committee with broad bipartisan support. This is an example of where we can come together and help provide greater educational opportunities to our students and communities.”
State Representative, Paul Friel (D-26)
Treasurer Garrity thanked House Education Committee Chair Rep. Peter Schweyer (D-134) and House Education Committee Republican Chair Rep. Jesse Topper (R-78) for their support of the legislation.
“This bill is another tool for parents and families to be able access a more affordable higher education.”
House Education Committee Republican Chair Representative, Jesse Topper (R-78)
Incorporating a tax credit for Pennsylvania employers who provide contributions to PA 529 accounts was recommended by the Tuition Account Program Advisory Board, which oversees the PA 529 program, in its annual report.
HB 1745 would establish a 25 percent tax credit on employer contributions of up to $500 per participating employee per year. It would apply to contributions made to any 529 account. Seven other states – Arkansas, Colorado, Idaho, Illinois, Nebraska, Nevada and Wisconsin – currently provide a similar tax credit.
Treasury works closely with employers across the state to facilitate automatic payroll deductions for contributions to PA 529 accounts, and HB 1745 will take that to the next level. Making it even easier for families to save for education will lessen the burden of the cost of higher education and training for the next generation of Pennsylvania’s workforce.
PA 529 accounts can be used for a wide variety of expenses – including tuition, fees, books, equipment, room and board, and more – at four-year universities, community colleges, technical schools and qualified apprenticeships. They also offer significant state and federal tax advantages, and assets in a PA 529 account don’t affect eligibility for Pennsylvania state financial aid.
The PA 529 program has been helping families save and pay for education for more than 30 years. There are currently over 290,000 PA 529 accounts with assets of more than $6.9 billion.
There are two PA 529 plans to choose from, the PA 529 Guaranteed Savings Plan which allows families to save at today’s tuition rates to meet tomorrow’s tuition costs, or the PA 529 Investment Plan which provides numerous investment options with earnings based on financial market performance. The PA 529 IP was recently awarded Morningstar’s Gold Rating – making it one of the top two plans in the country.
For new parents and growing families, Keystone Scholars provides an automatic jumpstart for education savings. Keystone Scholars provides a $100 for every baby born to or adopted by a Pennsylvania family in 2019 and beyond – using no taxpayer dollars. So far, Keystone Scholars families have saved more than $76 million in companion PA 529 accounts since the program’s inception in 2019.